Everstone buys over 51% in auto component maker SJS for Rs 350 crore

The day-to-day operations will be managed by the three entrepreneurs – S Sivakumar, KA Joseph and V Srinivasan – who started the company in 1987.Kala Vijayraghavan&Sneha Shah | ET Bureau | Updated: October 12, 2015, 07:38 IST

MUMBAI: Singapore-based private equity firm Everstone Capital has purchased a controlling stake of over 51 per cent in domestic auto components maker SJS Enterprises for an estimated Rs 350 crore, executives close to the development said.

The money will be used to expand capacity.

The PE firm, launched by former Goldman investment bankers Samir Sain and Atul Kapur, acquired 26 per cent stake owned by American specialty printing company Serigraph and another 25 per cent stake from the three owners of the Bengaluru-based auto components maker.

As per the March 2015 rating release from ICRA, SJS Enterprises recorded a profit after tax of Rs 8.9 crore in 2013-14 on an operating income of Rs 92.7 crore, compared to profit of Rs 3.7 crore on an operating income of Rs 78.07 crore in 2012-13.

During the nine months to December 2014, the company reported a profit before tax of Rs 27.5 crore on an operating income of Rs 110.2 crore.

The auto industry contributed about 75 per cent to the company's revenue in 2013-14 while exports accounted for about 14 per cent.

In the first nine months of 2014-15, the company saw its operating profitability increase to 29.4 per cent from 13.5 per cent in the previous fiscal.

"SJS is a leader in its space and has a track record of excellence in manufacturing and customer service," said Sameer Sain, co-founder and managing partner at Everstone Capital.

"We believe a company such as SJS exemplifies the 'Make in India' philosophy and we will continue to focus investments in such sectors."

Everstone is an India and Southeast Asia focused private equity and real estate investment firm with assets under management of $3.3 billion.

Everstone, which has been aggressive in the consumption business, had raised $580 million under Everstone Capital Partners II and $425 million Indivision India Partners.

In September it closed its third fund of $730 million from global investors.

"The automobile sector is expected to benefit from the expected lower interest rate regime. However, PE investors have been cautious in the sector and are expected to continue to be so. At the same time, SJS falls more in the consumer/auto derivative space which may be more attractive," said Sanjeev Krishan, executive director and head of private equity transactions advisory services at PricewaterhouseCoopers India.

Early this month HUL sold its bread and bakery business, Modern foods to Nimman Foods, a company backed by Everstone Group.

Prices of most SUVs were cut between Rs 1.1 lakh and Rs 3 lakh following the implementation of GST, which subsumed over a dozen central and state levies like excise duty, service tax, and VAT from July 1.